St. Andrews Hospital’s history has been marked by a steady stream of annual contributions and occasional large donation spikes to fund capital campaigns. 

In her summary of St. Andrews IRS Form 990 data, Patricia Seybold documented over $13.7 million in gifts and donations to the local hospital between fiscal years (FY) 2001 and 2011. 

Of that total, financial audits show that just over $3.1 million were applied to operating budgets during that time period. On average, St. Andrews Hospital has used about $282K of contributions annually to offset operating losses that averaged over $590K annually between FY 2001 and 2011. 

Most of the donations made to St. Andrews Hospital over the years were either designated for specific purposes, such as hospital renovations, expansion, programs and equipment, or set aside by the Board of Trustees.

Board designated restricted funds totaled about $3.88 million at the end of FY 2011. In an email, Lincoln County Healthcare Director of Accounting and Controller Kristen Moulton defined these as follows: 

“These are donated funds set aside over the years by the Board of Trustees, in which the donor did not specify a specific restriction. Upon being voted Board designated funds, the funds are sequestered into an investment account and can only be expended upon a vote of the Board,” Moulton wrote. 

The board used $1 million from this fund to construct the Medical Arts Building (Family Care Center) and also draws on the fund annually to fund the Peggy Pinkham nursing scholarships, Moulton wrote.

The FY 2011 audited financial statement shows that St. Andrews Hospital has about $631K in permanently restricted net assets. Moulton further defined these assets as about $486K in a perpetual trust that LCH does not hold or control, but from which St. Andrews receives a portion of the interest earned. 

“The amounts on the balance sheet represent our percent share of the market value of the fund. The total interest received in 2011 was $19,401. This was used in the St. Andrews operating budget to help offset the expenses of those who cannot pay their bills,” Moulton wrote.

Moulton wrote that the remaining $145K in permanently restricted funds is a true endowment: the principal cannot be touched but earnings are unrestricted and may be used in operations.

MaineCare

With the statewide focus on MaineCare reimbursements to hospitals, many wonder if a MaineCare payoff would help balance St. Andrews’ bottom line. The short answer is no.

According to the Maine Hospital Association, the MaineCare reimbursement crisis is the result of a state payment process that was not responsive to the growth in MaineCare enrollment and use. MaineCare’s payments to hospitals prior to 2011 were based on estimated, rather than actual, MaineCare patient volume. To rectify this problem, the state changed MaineCare reimbursement for its largest hospitals to a pay-as-you go system.

Moulton reports that critical access hospitals, such as St. Andrews, continue to receive MaineCare reimbursements based on historical MaineCare patient volume. 

LCH CEO Jim Donovan reported in April 2012 that St. Andrews was owed about $186K cumulatively from MaineCare underpayments during fiscal years 2009-2011. 

This underpayment was offset in 2011 and 2012 when MaineCare patient volume declined at St. Andrews by more than 20 percent, resulting in MaineCare overpayment to St. Andrews, Moulton reported.

Moulton wrote that at the end of FY 2012, St. Andrews Hospital had a cumulative liability (overpayment) from MaineCare of $29K.

Sue Mello can be reached at 207-844-4629 or sumello@boothbayregister.com.